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Benefit Cost Analysis (BCA)

Benefit-cost analysis (BCA) is a standardized, systematic way to count the benefits of a mitigation project and to compare these benefits to the costs of mitigation. A complete benefit-cost analysis counts all of the significant direct benefits of a mitigation project. A benefit-cost analysis always involves looking at damages and losses twice: first, before mitigation (the “as-is” situation) and second, after mitigation. The benefits of a mitigation project are simply the difference in expected damages and losses before and after the mitigation project are completed.

To be eligible for federal funding assistance through FEMA’s Hazard Mitigation Grants programs, a mitigation project must be cost-effective (benefit-cost ratio of 1.0 or greater using the FEMA BCA software). FEMA’s BCA Tool [Version 5.1] to assist Sub-Applicants to determine the cost-effectiveness of their proposed mitigation project. The FEMA BCA software (and related training materials) are available for download at: http://www.fema.gov/benefit-cost-analysis#1.